Living Cities Catalyst Fund Annual Report July 2012-June 2013

From July 2012-June 2013,the Living Cities Catalyst Fund had loan commitments of $34.6 million from ten investors. Since inception, our total cumulative lending of $29.65 million has sparked initiatives with total funding of over $400 million. This report provides an overview of the Fund's investments and impact.

It is our pleasure to report to you on the fifth year of operations for the Living Cities Catalyst Fund.From July 2012-June 2013, the Fund had loan commitments of $34.6 million from ten investors. Since inception, our
total cumulative lending of $29.65 million has sparked initiatives with total funding of over $400 million.

In recognition of our work and our engagement with the social impact field, we also are delighted to report that the Catalyst Fund was selected for the third straight year for the ImpactAssets50 – a public database of private debt and equity fund managers that deliver social and environmental value in addition to financial returns.

Other key developments of the year included:

New Investments: This year, we closed two additional investments – a $2 million increase to Craft3 to support their industry-leading single family energy efficiency retrofit program and a new loan to IFF to support their geographic expansion of their healthy foods initiative. We expect to close the final loan in the first round of Living Cities’ signature Integration Initiative in the next few weeks. In addition, by the end of the calendar year, we expect to close our first Pay for Success (PFS) investment in the innovative Massachusetts Juvenile Justice PFS project.

Increased Deployment: Deployment of the Catalyst Fund started off slower than expected, but over the past year usage has more than doubled from $6.2 million to $13.5 million. We expected to continue to see higher utilization rates from our outstanding loans.

Loan Maturity and Repayments: Our three oldest loans on our books are beginning to repay. NSLF repaid their loan in full and the original TRF loan made a partial repayment in September 2013. Craft3’s groundbreaking secondary market sale of its energy-efficiency loan portfolio is pending, and we expect Craft3 to repay their loan upon completion of the sale.

Focus on Innovation: In 2013, Living Cities’ Capital Formation team was renamed the Capital Innovation team. This reflects our increased focus on innovation as well as deployment. With the repayment of some of our oldest loans, Living Cities is beginning to explore the restructuring of the Catalyst fund to better facilitate innovation.